Most Asian stock markets traded close to flat on Tuesday, mirroring overnight weakness on Wall Street as renewed losses in technology shares dampened sentiment. Thin year-end liquidity and the approach of New Year holidays kept trading volumes light across the region.
U.S. stock index futures were largely unchanged during Asian hours, offering little directional guidance to regional markets.
Asian equities subdued on thin volumes
Markets across Asia struggled to find momentum as many investors stayed on the sidelines. Several regional exchanges are set to close or operate on shortened schedules later in the week, further limiting activity.
Wall Street ended lower on Monday, giving back part of a recent rebound after heavyweight technology stocks came under pressure again. The renewed sell-off weighed on global risk appetite, with investors hesitant to increase exposure at elevated valuations near year-end and ahead of key U.S. policy signals.
Asian markets broadly reflected this cautious tone. Japan’s Nikkei 225 and the broader TOPIX index both edged about 0.1% lower. South Korea’s KOSPI traded mostly flat, while Singapore’s Straits Times Index rose 0.6%, outperforming regional peers.
India’s Nifty 50 added 0.1%, while Australia’s S&P/ASX 200 hovered around unchanged levels. In China, the Shanghai Composite was steady, while Hong Kong’s Hang Seng Index gained 0.3%.
Fed minutes in focus
Investor caution was reinforced ahead of the release of minutes from the Federal Reserve’s December policy meeting, due later on Tuesday. The minutes are expected to shed light on policymakers’ views following the Fed’s recent rate decision and its outlook for interest rates beyond next year.
Markets have increasingly priced in the possibility of further monetary easing in 2026, as inflation pressures show signs of cooling and economic growth moderates. However, uncertainty over the timing and pace of any future rate cuts remains high, particularly if U.S. economic data continues to show resilience.
Overall, Asian equities remain range-bound, with investors awaiting clearer signals from U.S. monetary policy before taking fresh positions.
